Face of cotton seed industry changing
Jun 1, 2007 9:51 AM,
By Elton Robinson
Farm Press Editorial Staff
One huge splash and a couple major waves rippled through the cotton industry Thursday afternoon, May 31, as no less than three companies announced acquisitions involving cotton seed brands.
Monsanto announced it has reached an agreement with the U.S. Department of Justice that will allow it to complete its proposed acquisition of Delta and Pine Land Company. Under terms of the agreement, Monsanto will be required to divest certain assets, including its U.S. branded cotton seed business which include Stoneville and NexGen cotton varieties.
Monsanto plans to close its acquisition and resulting divestitures as soon as possible following the required approvals from the court and the DOJ.
In line with its agreement with the DOJ, Monsanto announced it will be amending certain cotton licensing agreements so that its other cotton licensees have the same terms that Delta and Pine Land enjoyed with regard to the use of third-party trait technologies.
It will provide to Syngenta certain germplasm in Delta and Pine Land’s breeding pipeline that contains VIPCot trait technology. This action is intended to allow Syngenta to continue its development of this technology.
During the interim period between when the company completes its acquisition and when it completes its divestitures, the Delta and Pine Land business will operate independently of Monsanto’s other commercial operations.
Once the divestiture of the Stoneville and NexGen businesses has been completed, Monsanto will begin working to combine the Delta and Pine Land business into its business operations.
Shortly after Monsanto announced approval of its acquisition of D&PL, Bayer CropScience and Americot, Inc., made announcements related to Monsanto’s divestiture requirements.
Bayer CropScience announced it has entered into an agreement to purchase Stoneville Pedigreed Seed Co. from Monsanto for $310 million. “The acquisition of the Stoneville activities in the United States is a significant step in further expanding our successful cotton seed business, which forms part of our core seed crops along with canola, rice and vegetables,” said Werner Wenning, chairman of the board of management for Bayer AG.
As part of this agreement, Monsanto has agreed to sell to Bayer CropScience certain conventional cotton parental lines that Monsanto will acquire from Delta and Pine Land’s cotton breeding program. Monsanto will retain a non-exclusive license to these same parental lines. Bayer’s FiberMax brand and the Stoneville brand will continue to be licensed to use Monsanto’s cotton trait technologies.
Americot, Inc. announced it has agreed to acquire the NexGen brand of cotton seed as well as specific Delta and Pine Land germplasm. These acquisitions will make Americot the second largest cotton seed company in the Southwest region in market share, and the third largest in the country. According to Monsanto, Americot paid $6.8 million for the acquisitions.
The germplasm assets include the germplasm Monsanto had in its pipeline for the NexGen brand as well as certain germplasm from Delta and Pine Land.
Terry Campbell, general manager for Americot, says the acquisition “will provide us a larger footprint in the Southwest market; it will strengthen our portfolio of high-quality germplasm available to growers in the Southwest.
“Additionally, germplasm divested from Delta and Pine Land will be used to develop new cotton products under the Americot brand for the Mid-South, Southeast and the Southwest regions. Americot, Inc. is headquartered in Lubbock, Texas.
e-mail: erobinson@farmpress.com
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